The Counteroffensive with Tim Mak

The Counteroffensive with Tim Mak

Xi's Trump visit puts Taiwan's AI boom in crossfire

As the two superpowers fight for leverage over Taiwan, businesses that control the country's AI trend are walking a tightrope between them

Elaine Lin's avatar
Elaine Lin
Sep 24, 2026
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OUR LEAD STORY:

TAIPEI, Taiwan – For the U.S. and China, Taiwan could be the last puzzle piece to decide who wins the tech war. As AI takes off, Taiwan’s tech industry — which produces more than 90 percent of the most advanced semiconductors used in AI servers around the world — finds itself in the middle of a contest between two global powers.

But there is a trick: while Washington deepens its cooperation with Taiwan and uses the islands as leverage against Beijing, the nation’s economy remains deeply intertwined with China and its tech companies often rely on Chinese markets, suppliers, and business partners, which could make Trump’s administration hesitate with its support. Now, Taiwan is put in a difficult position. The country is divided in choosing who to economically align with.

This August, Taiwan’s Ministry of Justice Investigation Bureau examined about 60 cases in which Chinese companies allegedly changed the label on products from “made in China” to “made in Taiwan.” This helps Chinese companies import advanced AI chips or export Chinese products to the U.S. to avoid tariffs.

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These label-laundering cases are seriously sabotaging U.S. trust in Taiwan. It could not only put the relationship between the two countries at risk, but also damage trust in Taiwanese manufacturing labels.

While facing an increasingly likely attack from China, the Taiwanese government is building a “silicon shield,” connecting Taiwanese tech companies with the global economy. It made a commitment to help the U.S. to strengthen its AI boom.

After the paywall:

  • Why a chip insider says the AI shortage outweighs the scandal;

  • How Unimicron explains its Hubei-made products;

  • The Nvidia manager detained over chip smuggling to China;

  • Why Taiwan’s tech industry doesn’t trust Trump.

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Elaine Lin's avatar
A guest post by
Elaine Lin
Hi, I'm Elaine from Taiwan. I'm pursuing a career in journalism by working with The Counteroffensive and The Iran War Dispatches. I hope to let the world know more about Taiwan’s story!
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